Oil Prices Edge Higher as Iran War Fears Keep Energy Markets on Alert

Oil prices edged higher on Thursday as traders weighed the uncertain course of the war between the United States, Israel and Iran, a day after crude suffered one of its steepest sell-offs in months. The modest recovery came as investors tried to judge whether the conflict was heading towards a negotiated end or a fresh escalation.

FAKTA

• Brent crude: up 34 cents to $94.96 a barrel by 0825 GMT on Thursday.
• US West Texas Intermediate: down 27 cents to $87.85 a barrel.
• Both benchmarks fell more than 8 percent on Wednesday, their lowest settlement since 31 August.
• Eurasia Group: renewed US strikes 60 percent, a deal 10 percent, prolonged standoff 30 percent.
• Fresh escalation could push Brent to $110–$125 a barrel, the consultancy warns.
• Two tankers and a tugboat caught fire in the Strait of Hormuz after taking unauthorised routes, Iran’s Revolutionary Guard said.

Markets Steady After Sharp Sell-Off

Wednesday’s plunge followed heavy losses for President Donald Trump’s Republican Party in the midterm elections, which raised hopes of a diplomatic way out of the war. Mr Trump has said the United States has no immediate plans to strike Iran, and he acknowledged that the war and the higher fuel prices it brought for American households had weighed on voters. Analysts cautioned, however, that the situation remained far from settled. June Goh of Sparta Commodities said traders were watching closely for Mr Trump’s response to the election result, while uncertainty around the talks and shrinking global strategic oil reserves kept the market on edge.

Diplomacy or Escalation?

Eurasia Group lowered its estimate of renewed US strikes on Iran from 65 percent to 60 percent, but it also cut the chances of a negotiated agreement from 20 percent to 10 percent, as Iran held firm on its demands. The chance of a prolonged standoff rose from 15 percent to 30 percent. Citi warned that with the elections over, the White House could lean more heavily on its executive powers in foreign policy, raising the risk of further military action. A fresh escalation would probably send Brent crude sharply higher, into a range of $110 to $125 a barrel.

Hormuz and the Supply Picture

Shipping through the Strait of Hormuz, the key Gulf oil shipping route, remained a central worry. Iran’s Revolutionary Guard said the two tankers and tugboat had caught fire in separate incidents after the vessels tried to use unauthorised routes. Shipments have largely recovered, but transport costs remain high. JPMorgan estimated that rising exports and weaker demand had returned the global oil market to a surplus of 1.1 million barrels a day in September, widening to 1.4 million in October. Even so, commercial oil stocks remain near 15-year lows, according to Mukesh Sahdev of energy consultancy XAnalysts. In the United States, oil inventories fell last week while demand reached its highest level in a year. More international news is available on the Watan News English homepage.